Creating Customer Value

The purpose of business is to create and retain a customer.

Much has been written about customer orientation, customer relationship management (CRM), Customer Lifetime Value (CLV) metrics, Customer Centric organization models, customer retention, customer care?add any high sounding word with 'customer' preceding or succeeding that word and you have a new model, a new theory. Headline hitting books, celebrity author seminars and training till another theory comes along.

And we see the poor customer is still the most dissatisfied lot (that includes all of us specialists too, as customers).

What a manufacturer or service provider often thinks as a market or value proposition, customers respond in a diametrically different fashion. Why does it happen?

While business thinks in terms of products and derived values, customer is looking at satisfaction. The key question is whether all the strategy, product features, add ons and value creation lead to ultimate customer satisfaction.

Now this may seem a little contradictory. To illustrate it better let's take the example of Cell phone services. Companies are rolling out a new product every fortnight offering more value, in their perspective.

Then the point is why does the customer keep switching over to different service providers and products or packages so often, if the products are offering value.

The key here is more value propositions are being rolled out without looking at the very basic. Whether the value proposed gives satisfaction to the customers. If not it is not valuable.

The customer is buying satisfaction. Highest value is derived when the customer is fully satisfied with his purchase.

Some common myths in Value Creation

Myth # 1 More is often considered value

Buy one get one free schemes are rolled out. There is of course an instant sales push. However at the end of the scheme the customer feels that he had all along been paying 100% more for the products and perceives that very product as costly once the scheme is withdrawn. May switch to another product at the same price.

Conclusion: Dissatisfaction leads to value erosion

Myth # 2 Price is value

Many business considers lower price as offering more value. More often than not lowest price products end up as the second best with a higher priced product with similar product attributes leading the market. The simple reason is the higher price product may be offering a higher satisfaction due to perceived values and imagery. Car markets are a prime example of this syndrome.

Myth # 3 More Features or add ons are value

Businesses load a product or service with more features thus offering a higher value. While this may be attractive if the features are not backed by adequate supports the satisfaction may be less and value is reduced.

We encounter this everyday. A customer buys a product with many features but not demonstrated properly or may not be serviced properly. Enquiries may not be handled effectively. Airlines offereing add ons like free overnite accomodation are still not favored if the services, like enquiry handling, reservations, and time schedules are poor. Cell phones companies may be offering plenty of add ons like national roaming or free incoming calls etc. However if the billing is poor and billing enquiries are not addressed properly the customer is dissatisfied and leaves the service for another provider.

Myth # 4 Products are competing with similar products

This is often true in the leisure industry. A movie theatre may not be competing with another movie theatre. If the customer is not satisfied with a theatre or movie he may look at options to other entertainment sources, for instance an amusement park. We may call them discretionary time products. Highest satisfaction levels are very important in this type of business.

These are some of the examples of how businesses can go totally wrong in assessing value. While it is all good to talk of value creation some thought must go into the majoe ingredient in value that is the customer satisfaction.

And are business really serious about customer retention. As even a novice to business knows it is far cheaper to service and retain existing customers. The cost of acquiring new customer is very high.

Now how many business have consumer satisfaction index to monitor this prime factor in customer value creation

About The Author

R.G. Srinivasan is founder of Born To Win Forum. He is a certified trainer and consultant in training design & methodologies, focused on personal effectiveness and motivational training. He is also the author of ebooks, publishes 2 ezines on success and motivation and Home Business with an international circulation. His articles are published in more than 50 portals and websites across the world. He is featured as an Expert Author in Ezinearticles.com. Check out his home business ezine at http://home-businessleaders.tripod.com.

indiaventurelinks@yahoo.co.in

---

Fertilizer For Your Grassroots Marketing

Looking for a great way to drive traffic to your... Read More

Trapped in Your Comfort Zone? Break Out and Send Your Marketing Skyrocketing

A marketer whose advice I generally respect recently published an... Read More

A Guide to Brochure Printing

Brochure printing can be easy if you first identify your... Read More

Marketing Hesitation Costs Dearly

Timing is everything. Hate to be late? The early bird... Read More

Marketing Strategy 101: 10 Marketing Strategies I Learnt From My Oral Surgeon

This is how the conversation went on my follow-up visit... Read More

5 Ways to Market for Immediate Results

Sales are down, and I need more customers now! Sound... Read More

10 Tips For Packaging That Sells Products To Boomers

Boomers are a prime and growing target audience. Does your... Read More

Networking the Media

The media is a business's absolute best friend. It is... Read More

Medias Dirty Little Secret

I'm constantly amazed by all of the media reps from... Read More

Motivating Your Target

There's just no time to waste in a cyber day;... Read More

Stop Searching - Joint Ventures are the Solution to Doubling Your Business

First, define the end user (or ideal client) of your... Read More

The Seven Deadly Sins of Ineffective Nametags

Your nametag can be your best friend. It can be... Read More

Marketing Plans... A Simple Approach To Get Off The Marketing Roller Coaster

Are You Riding The Marketing Roller Coaster?If you're like many... Read More

The Path To Your Prospects Wallet Begins At His Heart

You want your prospect to make the decision to buy... Read More

Five Most Common Mistaken Beliefs About Joint Venture Marketing

Apart from being the fastest, easiest, and most profitable strategy... Read More

Mark Twain?s Great Marketing Idea

To tell you the truth (and about 53% of this... Read More

The Beginners Mail Order Opportunity Guide

The "Mail Order" business is not a business of itself,... Read More

Like Brushing Your Teeth

What do the following things have in common: brushing your... Read More

Should You Clap For Your Customers?

Does it make sense to clap for your customers? It... Read More

Communicating Our Attitude

The goal of successful marketing is to create long lasting... Read More

The 5 Minute Marketing Plan

If I were to ask you right now, what marketing... Read More

The Anatomy of Hype

On a copywriting board I frequent, someone expressed bafflement that... Read More

Mobile Marketing a New Age Strategy

More and more companies seem to be looking for new... Read More

Focus...a Marketing Strategy

The secret to increasing sales doesn't lie in choosing just... Read More

Fern Reisss PublishingGame.com: Achieve Media Attention for Your Business

Do you want to be quoted by the national press... Read More

Off the Shelf Small Business Mapping Software

All small businesses can benefit from inexpensive off the shelf... Read More

Wooing Women With Packaging

In just one month three California vineyards have introduced new... Read More

Postcard Direct Mail Marketing Tips And Ideas

Postcards are perhaps the least expensive way of reaching a... Read More

Getting The Big Picture Series: Part 2-Whats Beneath The Surface?

When you take a piece of gold to a pawn... Read More

Dont Let Your Business Cards End Up in the Trash

Business cards are such wonderfully creative little marketing products. Most... Read More

Roping In Loyal Customers While Making An Extra Profit!

You've probably bought a book or two at one of... Read More

Have Something Good To Say

If you don't get this right, you can just forget... Read More

Marketing Messages: Your 10 Most Important Business Principles

As a self-employed professional, you have two basic strategies for... Read More